With old-fashioned cigarette sales a thing of the past, Big Tobacco has turned the spotlight on high-tech substitutes it's calling safe. But critics are calling it a sham. By Mike Beirne

It's not unusual to see limousines pull up in front of davidburke & donatella, a fine-dining restaurant located on Manhattan's Upper East Side. But there's one set of wheels that truly stands out. It's a Ford Excursion with a chassis stretched to fit 24 people, and it never leaves the curb. That's just fine for the restaurant's patrons who happen to be smokers: The limo, paid for by the management, serves as a lounge where diners are free to abandon their halibut T-bone au poivre, dash across the sidewalk, then light up inside the SUV. Celeb chef and co-owner David Burke came up with the smoking-limo idea shortly after New York City passed its sweeping smoking ban in March 2003. Since then, the limo's proven so popular that it's become a kind of VIP seating area; even nonsmokers are seen hoping in.

Burke's idea has won cheers from Gotham's puffers, but it's not unique. Smoking havens stand out in a world where lighting up is banned virtually everywhere.

Habitus in Chicago's Wicker Park neighborhood know Marshall McGearty as a tobacco lounge. Check the city register, however, and you'll see it listed as a retail store.

Because McGearty derives the majority of its sales from cigarettes- not the beer, liquor and small food menu available inside- the lounge neatly skirts the Second City's anti-smoking ordinance that applies to bars and restaurants. The to R. J. Reynolds, which opened the establishment late last December. Marshall McGearty is no truck stop: It boasts leather sofas, a stone fireplace, a cork floor and a slatted ceiling that evokes the opens rafters of tobacco barns where the field harvesters hung their leaves to dry. Patrons are free to smoke any brand they walk in with, but a walnut tobacco bar with a polished marble top is a tempting dispensary. Once the smoker settles on a blend, a tobacconist pours the leaves into the hopper of a proprietary cigarette machine designed by RJR engineers. A retractable tray at the bottom holds 20 paper tubes that the turn of a crank packs with tobacco. An edge-cutter delivers a finished look before the cigs slide neatly into a box. The price is $8, about $2 more than a pack of Camels.

They may not seem to have much in common on first sight, but Burk's limo and RJR's lounge are both formidable signs of the times. As cities and towns across the country continue to enact new smoking bans (or tighten the grip of ones already on the books), lighting up is a habit that's being continually driven underground. As manufacturers face an increasingly hostile environment in which to sell their products, they're changing tactics out of necessity. These range from the promotion of smoking to an aficionado's pleasure to changes to the tobacco products themselves. With so much of the social and regulatory environment having turned against Big Tobacco, the obvious question emerges: Where can the industry go from here? The answer seems to be, anywhere it can.

"At this point we're doing something so new, our challenge is to make [McGearty] work as hard as we possibly can," said Brian Stebbins, RJR's senior marketing director. "We can't speculate about future lounges or future movements because we've got to make Chicago work."

Say it does. If the Marshall McGearty experience is exported to other markets, Reynolds could conceivably open enough lounges to boost its bottom line. The No. 2 tobacco maker could also try distributing Marshall McGearty branded smokes in select retail locations, using the lounge's sophisticated trappings as the marketing package. But as much as smokers need a sanctuary and Marshall McGearty is in step with the trend of consumers trading up to finer offerings in everything from the coffee to cheese, it's clear that the lounge in Chicago is hardly the short path of tobacco-industry growth. Some aldermen have vowed to close the city ordinance's loophole. Meanwhile, smoking bans in other markets, pending or active, make expanding this tobacco-lounge concept risky.